What is the retainage cap in Michigan?

On public work the planning cap is 10%. On private work it is No statutory cap. Bid documents and the subcontract still control if they are stricter.

When is retainage released in Michigan?

Public jobs typically release 60 days after completion. Private jobs: Per contract. Confirm the contract date — several states changed caps in 2025–2026.

How fast must a prime pay a sub in Michigan?

10 days after the prime is paid. Owner or agency to prime is Public: 45 days after invoice. Late-pay interest: Per contract.

Michigan · MI

Michigan retainage law and prompt-payment rules

Public retainage can be 10% — model cash around that, not 5%. Start in the code: Mich. Comp. Laws § 125.1563; § 570.1101 et seq..

Use this page when you are bidding or billing a job in Michigan. Public retainage is listed as 10%; private as No statutory cap. Typical public release is 60 days after completion.

Then open the retainage calculator for the dollars, or the G702-style pay application if you need line-by-line previous certificates.

Michigan public retainage is 10% until 50% complete

Michigan public retainage is the one that surprises 5%-habit estimators. MCL 125.1563 lets a public agency keep up to 10% of work in place until the job is 50% complete. After 50%, additional retainage is not withheld unless the agency finds unsatisfactory progress (then it may still keep up to 10% of the remaining work). Retained public funds belong in an interest-bearing account, and after about 94% complete a contractor can often swap an irrevocable letter of credit for the holdback.

Private Michigan retainage is still the subcontract. There is no statewide 5% private cap. Lien practice sits in MCL 570.1101 et seq. — do not treat public 10% rules as if they apply to a private plant job.

If the pay app is a Michigan public job, open the retainage calculator at 10% and turn on step-down only if the agency has actually stopped withholding after 50%. Then carry Line 5 forward on the G702-style worksheet so you are not re-withholding the first half of the job.

Statute text: Mich. Comp. Laws § 125.1563. Confirm the current code before you rely on a date.

Where is the job?

State and project type drive retainage caps and payment clocks

State

Project type

Caps and clocks change with project type, contract value, and the year you signed. Planning table only — confirm the current statute before you rely on a date.

Michigan — private work

Retainage capNo statutory cap

Typical retainage releasePer contract

Interest / penaltyPer contract

Owner / agency to primePublic: 45 days after invoice

Prime to sub (after prime paid)10 days after the prime is paid

Start in the codeMich. Comp. Laws § 125.1563; § 570.1101 et seq.

Public retainage can be 10% — model cash around that, not 5%.

Summaries compiled for planning. This site is not a law firm.

Run the retainage dollars

Questions this page answers

What is the retainage cap in Michigan?: On public work the planning cap is 10%. On private work it is No statutory cap. Bid documents and the subcontract still control if they are stricter.
When is retainage released in Michigan?: Public jobs typically release 60 days after completion. Private jobs: Per contract. Confirm the contract date — several states changed caps in 2025–2026.
How fast must a prime pay a sub in Michigan?: 10 days after the prime is paid. Owner or agency to prime is Public: 45 days after invoice. Late-pay interest: Per contract.

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